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They terrrk err jerrrbs! Vodafone replaces 2,600 roles with '600 bots' in bid to shrink €48bn debt

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Vodafone has replaced 2,600 roles with "600 bots" as part of a "long-lasting structural opportunity to reduce cost", the company revealed in its half-year results earnings call.

The telco has a growing debt pile following its acquisition of Liberty Global's European assets this quarter and a hit of €1.8bn due to India's decision to change the way it charges telcos for using airwaves.

It also said restructuring costs were €200m higher, reflecting reorganisations in both Italy and Spain.

Debt grew to €48.1bn by the end of Q2 compared to €27bn in March 2019. The increase primarily reflects cash outflows of €18.5bn relating to the acquisition of Liberty's assets, it said.

Group chief financial officer Margherita Della Valle outlined some of the company's existing cost-cutting plans.

"A key lever here is Vodafone Shared Services, where we currently have 22,000 employees, providing the group with a best-in-class cost structure below what could be achievable by third-party outsourcers. VSS is our global centre of excellence for robotic process automation and AI.

"We currently have over 600 bots in our bot farm, and we have already reduced 2,600 roles in the last 18 months. Given the magnitude of the opportunity and our systematic approach to implementing these initiatives at speed across the group, I'm highly confident that we have a long-lasting structural opportunity to reduce costs."

Jon Davies, head of digital at Vodafone, said last year its chatbot TOBi was delivering double the conversion rate of its website.

The bot began life handling FAQs through webchat, as well as end-to-end sales of SIM plans, and is currently being integrated with backend data, allowing it to answer questions about customer accounts. The next phase will be to introduce it into kiosks in store to allow people to carry out transactions such as pay-as-you-go top-ups.

During the call the business was also asked about its recent FTTP wholesale deal with Openreach covering 500,000 premises, despite already having an agreement in place with CityFibre to deliver fibre to 1 million premises by 2021.

Nick Jeffries, Vodafone UK CEO, said the firm was switching to a "dual sourcing" model for its fibre. "We can do the CityFibre deal and still be able to do other arrangements with other players. What we want is access to gigabit speeds at acceptable economics.

"And I think that what I was pleased about with the Openreach offer is these economics are a lot more comparable to what we have with CityFibre. So finally, they stepped forward with a model that we could, let's say, find sufficiently attractive." ®


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